No. 86.
Mr. Osborn to Mr. Evarts.

No. 85.]

Sir: The correspondence which I inclose refers to three English-built steamships, recently purchased at Valparaiso by Henry L. Stevens, an American citizen domiciled in Chili, and treats of three questions, to wit:

The good faith of such purchase.
The character of the protection to which such ships are entitled from the American Government.
The right of such vessels to carry the American nag, and to be clewed by American consuls.

It appears that these ships were purchased by Mr. Stevens, on the 27th of February last, from the South American Steamship Company, a Chili corporation. The bill of sale was recorded in the consulate at Valparaiso and a certificate to that effect made on the original, pursuant to, sections 220 and 221 of consular regulations.

Rear-Admiral C. R. P. Rodgers, from on board the flag-ship Pensacola in tie harbor of Valparaiso, under date of March 13, addressed me a note in which he expressed a doubt concerning the legitimacy of these transfers, and requested that I should inform him, in view of the probability of a war between Chili and Peru, if said ships were entitled to his protection. I immediately inclosed a copy of the admiral’s note to the consul at Valparaiso, and directed him to enter upon a thorough investigation concerning the legitimacy of said transfers, and to revoke the action therein taken by him, if it should be developed that they were not made in perfect good faith.

It will be seen from, the consul’s report that he concludes that the sale was made in good faith, and that the action of the consulate was in every respect proper. The report is quite lengthy, but inasmuch as it treats of the matter of this class of transfers in general, and refers to numerous precedents which tend to sustain that officer in his view of his duties I trust you will give it a careful consideration.

To the latter clause of my reply to Rear-Admiral Rodgers, I wish to call your especial attention. It will be observed that in responding to the admiral’s request, I therein gave him my views of the status of foreign-built vessels owned by American citizens, and of the character of the protection to which they are entitled. If I have erred it might, perhaps, be well that I should be informed.

Can vessels so purchased carry the American flag, and should they be cleared by our consular officers? The action of the United States authorities in Peru concerning one of said ships, the “Itata,” would seem to render it important that the views of the government in this regard should be more clearly defined. I request that the letter of Consul McKellar [Page 151] on this subject, which is inclosed, shall receive that consideration which the importance of the subject of which it treats would seem to demand.

It appears that the Itata was cleared from the American consulate at Valparaiso for Callao, and that soon after her arrival at that port her captain was directed by the United States consul, who was acting under instructions from Minister Gibbs, to haul down the American flag under which she had sailed from Valparaiso. I have a note from Minister Gibbs wherein he inform sme of his action in this matter, and explains that his course was based upon the theory that registered vessels only have the right to use the American flag. Section 226 of the consular regulations will, I admit, bear an interpretation consistent with this view, yet I can hardly believe that the State Department intended that this section should be so construed. Sections 220, 221, and 225 clearly recognize the right of American citizens to purchase foreign-built ships, and acknowledge the obligation of the government to afford them, at least, a qualified protection. I am not prepared to believe that the department desired to be understood as saying that our citizens might purchase these ships, but that they should not sail them. And yet I submit that Mr. Gibbs’s interpretation leads to this. In this connection I beg to call your attention to an opinion of Mr. Gushing, to which reference is made on page 6 of the “Digest of Opinions and Leading Cases on International taw” recently forwarded by the State Department to this legation.

That there may be no conflict with our authorities in Peru I have directed the acting consul at Valparaiso to clear only registered vessels for Peruvian ports until he shall be further instructed.

I have, &c.,

[Inclosure 1 in No. 86.]

Rear-Admiral Rodgers to Mr. Osborn .

Sir: Since my arrival in this neighborhood I have learnt with much concern that three steamers” hitherto sailing under the Chilian flag have raised the flag of the United States, and have been furnished with prima facie evidence that the transfer of ownership to an American citizen has been made in good faith.

These vessels, it is believed, are owned in this country, and the American citizen who is their alleged purchaser has domicil in Chili. I am told that he is not a man of fortune, nor has he hitherto been thought able to buy a costly line of steamships. If such transfers may be made, the whole mercantile marine of Chili may thus find immunity from capture in evident violation of the belligerent rights of Peru, should the war now imminent break forth between the two great South American republics.

Our consular regulations declare that “the privilege of carrying the American flag is under the regulation of Congress, and the statutes have not made that privilege practicably available to any ships except those duly enrolled at some custom-house.” I am aware that our attorney-generals have affirmed the right of a citizen of the United States to purchase a merchant ship of a belligerent anywhere, at home or abroad, and that the ship so purchased becomes entitled to bear the American flag and to American protection, but it was equally insisted that the purchase should be bona fide and property passed absolutely and without reserve.

The English admiralty courts in making similar decisions have also insisted that no interest should remain with the seller.

In our civil war, Southern vessels sold to English subjects, and furnished with provisional registers by British consuls, found little favor in our prize-courts, and it is probable that the courts of Peru would give little heed to the flag of the United states hoisted on board Chilian ships merely to save them from capture, or to the certificate of their being owned by one of our citizens domiciled in Chili.

I may at any moment be called upon to protect by force of arms ships carrying the [Page 152] flag of our country in these seas, and I therefore respectfully beg your permission to call your excellency’s attention to the facts I have recited, and to ask whether the steamers in question are entitled to the protection of the squadron under my command.

The consuls of the United States in Chili are subject to your supervision, and I know that you as well as Mr. McKellar will share my desire that our flag shall not be used by those not entitled to its protection.

I have, &c.,

Rear Admiral Commanding United States Naval Force in the Pacific.
[Enclosure 2 in No. 86.]

Mr. Osborn to Admiral Rodgers.

Sir: Your favor of the 13th instant, making certain inquiries concerning the alleged transfer to an American citizen domiciled in Chili of three steamers heretofore carrying the Chilian flag, was received to-day by the hands of Mr. McKellar.

I have caused Consul McKellar to be furnished with a copy of your letter, and have directed him to make prompt and careful inquiry as to the legitimacy of such pretended transfers, and to forthwith revoke all documents by him executed under which said vessels assume to be American vessels, if upon due investigation he shall become satisfied that your suspicions concerning such transfers are well founded. From a brief conversation with the consul on this subject, I am led to conclude that his action was based upon sections 220 and 221 of the Consular Regulations, and that he did no more than is therein required of an American consul Upon the sale in good faith, within his consulate, of ships to American citizens. Good faith in the transaction, however, is absolutely essential to entitle it to respect from the American authorities, and if it shall appear that the consul has been deceived by the owners in this regard, I apprehend that he will not be slow in canceling the papers by him executed.

However, assuming that the sales were made in good faith, the property interest thereby acquired must be regarded as other property belonging to citizens similarly situated is regarded, and is entitled to protection in the same degree and no other. If war should unfortunately occur between Chili and Peru, and the purchaser of these ships should continue his domicile in Chili, his property, like that of others so situated, would become a legitimate subject of seizure by Peru; and while the United States Government would, probably, in case of such seizure interfere to the extent of insisting that its foreign domiciled citizen should be fairly and legally dealt with, it would, I apprehend, with the accomplishment of this, regard its duty “to him as fully discharged. The government does not, in my judgment, expect its naval force to be used in protecting from legitimate seizure by belligerents, property so owned by its foreign-domiciled citizens.

I will cause you to be fully informed of the result of the consul’s inquiry.

I have, &c.,

[Inclosure 3 in No. 86.]

Mr. McKellar to Mr. Clayton.

Dear Sir: I have had my attention called to a telegram from Lima, which states as follows: “American minister raises difficulties to accept the documents of steamer Itata, and says that the consul had no authority to issue them.”

I think this must be a mistake, as the facts of the case are as follows:

Mr. Henry L. Stevens, an American citizen residing in this city, has purchased this steamer and others last month. The respective bills of sale of these vessels were executed before me and duly recorded at the consulate, in conformity with Article XVII of Consular Regulations, 1874, a copy of which article I have attached to each bill of sale, as well as a certificate that the purchaser is a citizen of the United States. I may also state that, besides the referred regulations, I have for my guidance a book furnished this consulate by the Department of State, viz, “Digest of the Opinions of the Attorneys-General [Page 153] and Leading Decisions of the Federal Courts with reference to International Law,” &c. On page 6 will be found the opinion of Mr. Cushing in reference to the purchase of foreign-built vessels by citizens of the United States; on page 142, Article XXVI, is another opinion of the same eminent jurist on the same subject. I annex herewith a copy of the articles referred to.

I may furthermore state that my action with reference to the above transfers has been precisely as that observed on former occasions at this consulate by my predecessors.

I had written the government upon the subject, and our minister at Santiago is cognizant of the matter.

I am, &c.

United States Vice-Consul.
[Inclosure 4 in No. 86.]

Mr. McKellar to Mr. Osborn.

Sir: I have the honor to acknowledge receipt of the communication of your excellency dated 15th instant, which reached me on 18th, inclosing copy of letter of Rear Admiral C. R. P. Rodgers, Commanding United States Squadron on Pacific station, to which letter my special attention is directed, referring to the transfer of three steamers hitherto sailing under the Chilian flag, and which have raised the flag of the United States, and have been furnished with prima facie evidence that the transfer of ownership to an American citizen has been made in good faith.

Your excellency furthermore states that if the surmises of Admiral Rodgers concerning the legitimacy of the transfer of these ships are correct, the action of the consulate, concerning their sale cannot be too soon revoked, but if on the contrary the sales were made in perfect good faith, as is contemplated in the consular regulations, that fact cannot be too soon fully developed.

Your excellency furthermore requests me to enter upon a thorough investigation concerning the legitimacy of such transfers at the earliest possible moment, and if it shall be developed to my satisfaction that such transfers were not made in good faith, I shall cause the authority by me executed, under which such vessels assume the character of American vessels, to be annulled, and finally that I will report to your excellency fully my action in the matter.

I take for granted that the three steamers referred to are the Itata, the Loa, and the Rimac, sold recently by Horatio Lyon, esq., Agent of the South American Steamship Company, to Henry L. Stevens, esq., of this city. Your excellency’s understanding that the action of this consulate in this matter was had under authority of sections 220 and 221, of the Consular Regulations of 1874, and that the steps required by those regulations were duly taken by this consulate in strict accordance with the letter as well as the spirit of Article XVII, is most correct.

The sale and transfer of the said steamers was made on or about the 27th February last past by Mr. Lyon, the company’s agent, in its name and by its authority, and his acts therein were approved by the board of directors of that corporation, who further authorized said agent to cause to be extended and to sign the corresponding instrument, which he accordingly did on March 11 last past, before Julius Cæsar Escala, esq., one of the notaries public of this city, in strict accordance with the laws of Chili in such case made and provided.

In the conscientious conviction of persons who, like myself, have been personally acquainted for years with all the gentlemen concerned in and parties to the transaction, their high personal and commercial character and standing would emphatically and totally preclude even the shadow of a shade of doubt, far less incite suspicion, as to the bona fides of any arrangement made by and between them. But when such arrangement, in addition to such a guaranty, is stamped with the sanction of a notarial instrument executed before and duly authorized or certified by a gentleman of such high standing in his profession as Mr. Escala, who is par excellence the notary always employed by the mercantile community of Valparaiso, no higher proof can be adduced.

In no part of the United States certainly, and, to my knowledge, probably in no other part of the world save France and Italy, is the maxim, “a cilibet in arte suâ credendum est,” so apposite as when speaking of notaries public in Spanish and Hispano-American countries (Chili, for instance) when acting within the scope of their legal attributes. His certificate,, authenticated by his signature and notarial “sign” or seal, is the strongest possible voucher and proof of the exactitude and authenticity of [Page 154] the assertions or statement of facts therein by him asserted. He is by law “un ministro de fé i. e., a minister of faith, and his signature and notarial sign or seal to all Ms acts are “confirmation strong as proofs from Holy Writ,” and as such are received both in judicature and without in the above-mentioned countries.

I have been thus extensive, even, I fear, to prolixity, in this exposition to demonstrate to your excellency that so far from having contented myself with a perfunctory discharge of my duties in this respect, I exacted and obtained the most convincing and irrefragable proofs of the good faith observed in the sale now animadverted upon.

Admiral Rodgers does not state the name of his informant who told him that the American citizen “who is the alleged purchaser” of the steamers in question “is not a man of fortune, nor has he hitherto been thought able to buy a costly line of steamships;” but if Mr. Stevens, the actual purchaser of those vessels, be the person alluded to by this innuendo, I can assure you that from my long residence in Valparaiso, and my experience among its capitalists, I am far from being of the same opinion as his informant. Mr. Stevens is a young, enterprising American, well and creditably known in commercial circles here, and could readily find “backers” of the strongest kind to enable him to effect the purchase. And he could the more readily do this as the objects of such purchase were three fine and popular steamers, and he had determined to place them under the aegis of the ensign of his native country, as he was entitled to do.

As it was, he proposed to pay the consideration money in my presence, and so it would instantly have been done had I seen any reason for executing the performance of what I considered an idle ceremony, as I, neither then nor at present, had the slightest doubt, certainly no suspicion, of the good faith of the parties, and especially as I was aware that the notary authorizing the transfer would take care to be satisfied a$ to the pecuniary part of the transaction.

I trust I have demonstrated to your excellency’s satisfaction that the proof of the bona fide nature of the purchase was satisfactory to myself, and so would have been to the most hypereritically captious of United States consular officers. I deemed the purchase to have been fair, and as the regulations specify no character of proof and define no method of its rendition, I felt not merely satisfied but authorized in relying upon the employment of a sound discretion and judgment in the matter.

I note that Admiral Rodgers cites and founds upon a clause in section 226 of Consular Regulations (ed. 1874), which declares that “the privilege of carrying the American flag is under the regulatio’h of Congress, and the statutes have not made that privilege practicably available to any ships except those duly enrolled at some customhouse “; but admits at the same time that he is “aware that our Attorneys-General have affirmed the right of a citizen of the United States to purchase a merchant ship of a helligerent anywhere, at home or abroad, and that the ship so purchased becomes so entitled to bear the American flag and to American protection; but that it was equally insisted upon that the purchase should be made bona fide, and the property passed absolutely and without reserve.”

It is evident from the tenor of the regulations, that the consul is the officer to be satisfied with the proof of the bona fide character of the purchase and of its fairness. I have already manifested to your excellency, to your satisfaction I trust, that I had the most conclusive and irrefutable proofs possible of these facts before becoming satis-lied, and I have had, as yet, no motive for changing myopinion.

Respecting the clause quoted by the admiral, as above set forth, I submit it to your excellency’s superior judgment, as to whether such a clause, which is seemingly rather a dictum of the compiler than any statutory enactment, can override or invalidate the previous declarations. In my opinion, certainly not. Paragraph 225 of same article even declares that “the right of American citizens to acquire property in foreign ships has been held to be a natural right, independent of statutory law, and is declaratory of such right therein, and of their right to protection in the enjoyment of the same.”

The acquirement by an American citizen to an undivided share in a foreign vessel certainly does not entitle him to display the American flag by virtue of such ownership, but his interest in such vessel, to use the cautious and rather vague language of the paragraph, “is no more and no less” entitled to recognition than the property of an American citizen.

The intent and meaning of the regulation is plainly shown by the first paragraph (section 634) of chapter XXXIII of the Consular Regulations of 1856, from which the regulation of 1874 is copied in ipsissima verba:

  • Sec. 634. Inquiry is frequently made of the Department of State and of the Treasury as to what documents can be issued under the laws of the United States to foreign?-built vessels, purchased and wholly owned by citizens of the United States, whether purchased of belligerents or neutrals during a war, to which the United States are not a party; or in peace, of foreign owners, the purchase in either case being in entire good faith.
  • Sec. 635. Vessels so purchased and owned are entitled to the protection of the authorities and flag of the United States, as the property of American citizens, although no [Page 155] register, enrollment, license, or other marine documents prescribed by the laws of the United States can be lawfully issued to such vessels.”

This is also affirmed by Attorney-General dishing, whose opinion will be found in page 6 of “Digest of Opinions and Leading Cases on International Law,” in the following words:

“A citizen of the United States may lawfully purchase a merchant ship of either of the belligerents, Turkey, Russia, Great Britain, France, or Sardinia, and if purchased bona fide, such ship becomes an American vessel in the sense of American property, although she is not an American vessel in the sense of the registry or enrollment acts; and she is entitled to protection and to the flag of the United States although she cannot take out a register. That is because she is foreign-built, not because she is belligerent built. The question as to what documents such a ship is entitled to, referred to, but not decided.”

The correctness of these views was entertained by the Hon. Thomas H. Nelson and General Judson Kilpatrick, United States ministers to Chili, and by Commodore John Rogers, commanding the United States squadron, then in the bay of Valparaiso, during the year 1866, at which time war existed between Spain and the Republic of Chili, and the ports of the latter were blockaded by a powerful and numerous Spanish squadron, was admitted and cordially acquiesced in by the Spanish Admiral, Don José Manuel Pareja, and his successor Don Castro Mendez Nunez, and their subordinates. In fact, no doubt existed, and no question was raised as to the fact, in the minds of any of these gentlemen, as to the legality of the acts of Mr. Silvey, then United States consul at this port, and his successor in office, Hon. A. W. Clark.

Commodore Rodgers did not content himself with a mere verbal approval, but on several occasions rendered prompt and efficient aid in similar cases. In the case of the Gravina, he intimated to Consul Clark his intention to have interfered, had the Spanish admiral refused to deliver her up.

This vessel then wearing Chilian colors had been sold in transitu to an American purchaser. Upon her approach to Valparaiso, displaying the Chilian flag, she was seized by the Spaniards, and condemned as a lawful prize by the prize court constituted and held on board the flag-ship of the capturing squadron. So soon as this came to the knowledge of Consul Clark, he proceeded on board the Spanish flag-ship, and exhibiting the documentary evidence of her new American nationality, demanded her release as the property a citizen of the United States. The Spanish admiral having examined the documents, admitted the justice of the demand, and ordered her release, courteously excusing himself, for evident reasons, from towing her into the anchorage by his own men. This was done by Commodore Rodgers.

Upon the evening previous to the bombardment, Commodore Rodgers put a crew of his own men on board, who took her out and anchored her close to the Spanish squadron. She was boarded by an officer from the flag-ship, who examined and indorsed her papers and retired. After the bombardment next day, the commodore, having ascertained that it would not be renewed, again sent a crew on board and brought her back to her anchorage in the port.

An instance occurs to my recollection of three Chilian vessels, whose names have at present escaped my memory, which were sold while at anchor in one of the southern ports, Talcahuano, if I mistake not, to an American purchaser. The evidence of purchase of these vessels was duly recorded in this consulate, and delivered to the purchaser, together with the proper certificates. He, taking them and three United States flags which he had caused to be made here for the purpose, started off for Talcahuano, where he arrived about noon of the day after the arrival there of the Vencedora, one of the Spanish squadron. Immediately upon reaching Talcahuano he repaired on board his vessels, furnished each with its corresponding documents, and ordered the American colors to be hoisted. This at once brought a boat off from the Vencedora, the officer in command of which examined the papers, indorsed them and took his leave, laughingly expressing his regret that he had not effected their capture previously.

Upon many occasions valuable assistance was rendered by the Spaniards to vessels recently flying the Chilian colors but which had been purchased by American citizens Nor was this a mere act of courtesy on their part. It arose out of their knowledge of the rights of the American owners, which they considered as properly authenticated by this class of documents. For they burned remorselessly every vessel they could lay hold of carrying Chilian colors; although wholly owned by Spanish subjects lately resident in Valparaiso, and who had taken refuge on the Spanish squadron.

Further proof as to the course of this consulate being considered legitimate, may be adduced from the fact of the United States consuls in Callao, and other ports of Peru, following the example of this consulate, and copying the formula used by it, with the approval of the then American minister to Peru.

I may likewise mention the significant fact that accounts of the receipts for the fees charged and received by this consulate for services in this behalf, and for the subsequent arrivals and deposit of papers, &c., of such vessels were approved by the Department of State without objection.

[Page 156]

That the items and facts originating these fees were not unobserved by the Department is evident from the fact that this consulate was informed by it of the non-observance of the regulations exempting those who regularly traded between Port Constitution and Valparaiso from the payment of consular fees more than once in each and every three months.

I have thus endeavored to show your excellency that my course in relation to the three steamers above mentioned was not an adoption of the ancient rule of sic volo, sic jubeo, stat pro ratione voluntas, but was based upon reasons gathered from the practice long since adopted by my predecessors in the consular office, sanctioned by the approval of the gentlemen whom I have above mentioned, and admitted by the officers of the hostile squadron under the circumstance of a state of actual war, which admission on their part caused them heavy pecuniary losses in prize-money which they could have realized had they doubted of the legality of the consular proceedings.

Hoping the foregoing statements may meet your excellency’s approval,

I have the honor to be, sir, your obedient servant,

United States Vice-Consul.
[Inclosure 5, in No. 86.]

Mr. McKellar to Mr. Osborn.

Sir: I have the honor of laying before your excellency the following statement of facts which have recently taken place relative to certain acts on the part of the United States consul at Callao, Peru, to which I desire to direct your most serious attention in view of the delicate and unpleasant position in which the difference of opinion between that functionary and myself, and his acts consequent thereupon, have placed this consulate.

Not alone has it originated a grave public scandal, but, as I shall have the honor of manifesting to your excellency, has caused considerable pecuniary damage to an American citizen resident here.

The steamer Itata, formerly belonging to the South American Steamship Company, was sold on the 27th day of February last past to Henry L. Stevens, esq., a citizen of the United States resident in this port. Mr. Stevens furnished this consulate with proof of his purchase, of the bona fide nature of the transaction, and that the property had passed to him absolutely and without reserve. Being desirous of placing his lawful property under the protection of the authority and nag of the United States, he desired that the bill of sale might be recorded in this office, and the original delivered to him with the usual certificate indorsed thereon.

The proof being in the highest degree satisfactory, and I, deeming the purchase fair, acceded to his request and recorded the bill of sale, and indorsed the desired certificate.

Upon the departure of the Itata, she was duly cleared by this consulate and the port authorities, and sailed on her voyage north, stopping at Coquimbo, Caldera, and Iquique, where her documents were received, and the vessel duly cleared by the United States consul and port authorities of those ports. Arriving at Callao, her captain deposited his papers with the United States consul there, who received them without remark. His subsequent acts will be best told by his own communication to the captain, dated 14th instant, a copy of which, marked A, I herewith inclose. Captain Lautrup obeyed the order therein contained to haul down the American flag, and took back his papers. As the consul had informed him that he did not “officially recognize her as an American vessel,” and he “must decline to clear her, or to issue any papers to her whatsoever,” Captain Lautrup had no other resource than to obtain a sea-letter or “passavante” from the Chilian consul-general there, protest in due form against the minister and consul of the United States at Callao, and leave thence under the flag; of Chili.

I have the honor to inclose herewith a translation of the protest, which is dated 15th instant, and duly certified by the Chilian consul-general at that port, which translation is marked B.

I have already in my communication to your excellency of the 22d instant, stated fully my opinion of the action had in this matter by this consulate, and some of the reasons which induced me to form that opinion. I take this opportunity of adding some recent examples, which, I respectfully suggest, will corroborate and strengthen the views I therein expressed.

The former Peruvian steamer Sofia, which, sold and transferred to an American citizen, has been sailing in and out of Callao and other ports along the coast for more than a year past, wearing the American flag, without any objection on the part of the United States consul, minister, or admiral, or the various port authorities.

[Page 157]

The steamer Honduras, built in Liverpool, England, in 1871, arrived in Valparaiso in August of that year, went hence to Panama, where she took the American flag—being owned by the Panama Railroad Company—and has ever since been actively engaged in traffic between the ports of the Pacific coast of Central America and Panama. And, moreover, she is marked on the record of American and foreign shipping as an American vessel under the number 875. The steamer Independence was purchased at Valparaiso by an American citizen, and took the American flag February 7, 1877, and the steamer Cargador, purchased by an American citizen, took the American flag April 24, 1877. This was during the consulate of D. J. Williamson, esq., who also was chargé d’ affaires during the absence of the Hon. C. A. Logan, your excellency’s predecessor.

Both the last named vessels, furnished with the documents usual in purchases by this consulate, left Valparaiso, displaying the American flag, for Panama, calling at Callao, while either the present incumbent, or his late father, the Hon. Philip S. Clayton, was consul there. They passed the consulate, were regularly entered in and cleared thence without objection on the part of that office or of the port authorities, and proceeded thence to Panama, where they are at present still under the American flag.

My opinion of the duties of an American consular-office in similar cases, having been formed upon the reasons heretofore detailed to your excellency in my above recited communication, and not having been whimsically or inconsiderately adopted, is still unchanged. Should a vessel in the position of the Itata arrive at this port, such is my conscientious conviction of those duties that I should not hesitate to dispatch her.

Furthermore, there are one or two vessels similarly circumstanced, i. e., owned by American citizens and wearing American colors for the last thirteen or fourteen years on this coast, which have been regularly entered and cleared at this consulate both by my predecessors and myself.

Having been favored by Mr. Stevens with the telegrams sent here by Captain Lautrup from Callao, informing him of the action of the consul in the matter, I at once addressed a letter to that officer, dated 15th instant, the object of which will fully appear by reference to the copy thereof herein inclosed and marked C, to which I have yet to await an answer.

But, sir, the mail of the 25th instant brings me copies of the South Pacific Times (Vol. VII, Nos. 134 and 135), a paper published at Callao in the English language, containing a communication from a certain Henry S. Wetmore, of that place, relative to the steamer Itata, apparently in answer to an editorial interrogatory put in consequence of the insertion of a communication signed “A disenchanted Yankee,” in No. 134 of March 13, 1879. I send herewith the two newspapers to which I refer.

It will, I imagine, require but little critical sagacity to enable any one to preceive that the letter, the answer, and the editorial comments therein contained in both papers are ail inspired by the identical Henry S. Wetmore, who takes it upon himself to pronounce his opinion ex cathedra upon this point. Be this as it may, the letter of this Wetmore has been translated and so published in the Callao public newspapers, and repeated yesterday by the Mercurio, the paper having the largest and most influential circulation in Chili.

It appears that this letter is published in the Callao newspapers as emanating from the United States consul, and as such misstatement has not been contradicted by him, so far as I know, I may be excused if I accept it as containing an exposition of that gentleman’s opinion upon the matters therein definitely pronounced upon.

The tenor of the remarks and of the letters above referred to have given me serious apprehensions that the American consul in Callao has unwittingly been made an instrument, in an attempt to carry out a deep laid conspiracy for depriving an American citizen of his lawfully acquired ownership of the Itata, and probably that of the other steamers which were about to follow her to Callao; for I am far from being at all inclined to consider him as being instigated by any other motive than his sincere desire to fulfill his views of public duty in the premises.

But in this direct opposition of our conflicting opinions as to our duty as United States consuls in such cases, and in view of the serious consequences which will unquestionably arise therefrom unless the question be promptly settled by the proper department at Washington, I have the honor to lay the entire subject before your excellency, that you may be pleased to transmit the same to the government for instructions in that behalf.

The only feeling which actuates me at present is a deep regret that Mr. Stevens should have been subjected to considerable pecuniary loss, as finding that in the opinion of the consul and minister of the United States his vessels are, in Callao at least, not permitted to be recognized as American ships, has disposed of them to a British subject, who has placed them under the protection of the flag of that nation. So that the present difficulty is at an end, for the present, at least, and nothing remains to avoid such for the future, save a declaration of the Department of State as to the means by which an American citizen, being solely and wholly owner [Page 158] of a foreign-built vessel by bona fide purchase can publicly claim the protection of his government and flag, if it is forbidden him to display that flag upon the vessel.

While upon this subject, I may as well state to your excellency that Captain Lautrup himself has just made declaration that during the years 1866 and 1867 he was in command of a vessel called the Adelida, purchased by an American citizen in Sydney, New South Wales, who placed her under the American flag. Furnished with the bill of sale and other usual consular papers, he sailed with her under that flag to Batavia. Singapore, Calcutta, and thence back to Sydney, where the vessel was sold.

He has also exhibited to me the certificates of the deposit and delivery of the bill of sale and papers of the said vessel by the various consuls-generals, consuls, and vice-consuls of the United States at those ports. And all this without let, hmderaiice, or even question therein arising on the part of any consular or port authority whatever.

Referring to that portion of the dispatch wherein I allude to Henry S. Wetmore, who, as I hate every reason to believe, is the instigator, if not the originator, of the conspiracy to which I have heretofore made reference, I have just discovered that my predecessor, D. J. Williamson, esq., who knew him well, both while here and in Peru, expressed his opinion of him in no flattering terms in his dispatch to Hon. Wm. Hunter, Second Assistant Secretary of State, dated Valparaiso, October 14, 1875, No. 49, when he closed a long explanation with reference to the rent of the consulate in Callao with the following strong but just language, referring to the same individual:

“I regret that Mr. Thomas has so lowered himself to eulogize this man Wetmore, who states that he is the owner of property in five of the States of the Union. He may be the owner of property as he states; I think that his property, if known, would consist of a dice-box and a pack of cards. Gambling has been his principal business in Callao, as it was in Savannah, Ga., and other southern cities before he came to South America.”

I have, &c.

United States Vice-Consul.